RFID: Increasing Supply Chain Visibility

A steady flow of real-time data leads to efficiency in the supply chain, and more data means more efficiency, says a report from the Aberdeen Group on supply chain visibility.

The importance of supply chain visibility is well understood, and the report cites an unexpected source as a potential boost for visibility in the enterprise: RFID tagging.

Use of RFID on product enhances the potential success of models for advance planning, according to the report. Companies using RFID in retail supply chains are five times more likely to successfully leverage statistical modeling to assess supply chain risk; retailers using RFID are almost ten times as likely to successfully raise visibility to traceability at item level.

RFID enables operational benefits including increased visibility into supply chain disruptions, end-to-end supply chain milestones, and landed costs, the report stated.

All of these benefits result in reduced trade compliance errors and associated fines, as well as supply chain velocity improvements of 15 percent.

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How Supply Chain Disruption Affects the Financial World

A common concern of global insurance firms is, unsurprisingly, the financial impact of supply chain disruptions. An industry risk assessment published earlier this year stated that 43 percent of corporate insurance experts consider the business interruption of supply chain disruption to be their most significant concern.

Always a concern for supply chain participants themselves, supply chain disruption has downline impacts that have financial consequences on other business entities.

The financial losses that can result in a local economy due to supply chain disruption are so concerning to global insurance analysts that they actually top natural disasters and fires in importance. Business interruption, the report stated, accounts for 50-70 percent of insured property losses.

“As supply chains are becoming increasingly complex in a global sourcing world, any disruption – for example due to natural catastrophes, IT/telecom outages, transportation issues, a supplier’s bankruptcy or civil unrest – can lead to a snowball effect,” said Paul Carter, global head of risk consulting at Allianz Global Corporate & Specialty (AGCS), said recently.

“Business continuity planning is key and should be part of any company’s procurement and supplier selection process. Yet, to ensure appropriate mitigation measures can be implemented, it is no longer sufficient to know your ‘critical’ suppliers; you also need to have a grasp of how they manage their own supply chain exposures,” Carter concluded.

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The Most Concerning Security Threats to B2B Partners

What are the threats to B2B security that should concern integrated partners today? The B2B international consultancy conducted a global IT risks survey to determine the answers.

Security should always be on the B2B partnership radar, in this era of high-profile, Big Data breaches. Knowing where to concentrate attention and effort in shoring up security is a critical undertaking.

The IT risks survey, which incorporated almost 2,900 interviews of IT professionals in 24 countries, indicated that preventing breaches and protecting data are their top two concerns, and that both of these concerns have increased in importance since 2012.

One of the leading security challenges is the introduction of mobile, a business necessity for many supply chain participants, and BYOD in particular.

An alarming 35% of participants in the study indicated loss of business data as a result of external attack, and characterized the attacks overall as harder to detect. Another trend is threat to smaller businesses, which are less equipped to respond to security breaches in real time.

The study concluded that major issues have included underestimation of the increasing sophistication of malware, failure to implement adequate mobile device management, and management failure to properly assess the real risks and costs of breaches.

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B2B Integration is Still Proceeding Too Slowly

B2B integration is progressing all over the world and in many industries, and rapidly so. But as rapid as the adoption has been, it needs to be more rapid still, some studies indicate.

One area where this lag is most evident is e-commerce, where B2B barriers are hindering the entry of developing nations into the global marketplace, by slowing their preparedness to do business with more advanced partner companies. A study by the London School of Economics cites poor technological infrastructure, weak security standards and poor training among the reasons for the lag.

Slow B2B uptake in e-commerce isn’t restricted to developing nations, however. Industry pundit David Levy has cited incorrect predictions by both Goldman Sachs and the Gartner Group that e-commerce sales would be in the trillions by now, but Forrester reported that it is still under $600 billion as of last year.

Per Levy, the lag isn’t due to technology, but inconsistency in business rules. Pricing standards vary wildly in many industries, he pointed out, and shipping and logistics rules are difficult to accommodate, even when the technology is there.

And the slow uptake isn’t only evident in e-commerce. Supply chain partnerships in Latin America are also falling behind in B2B modernization, due to limited Internet availability in many companies, according to Business News Americas.

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